Federal Reserve Chairman Ben Bernanke, Securities and Exchange Commission Chairman Christopher Cox, Bear CEO Alan Schwartz and JPMorgan CEO Jamie Dimon were among the witnesses to testify at the hearing about the central bank's role in brokering the $2-a-share sale. The Fed backstopped the deal by backstopping nearly $30 billion in risky mortgage-related securities. JPMorgan increased its offer to $10-a-share after a public backlash.

Schwartz told the Senate panel that the SEC should look into the trading preceding the collapse of the investment bank. Bear shares closed down 14 cents to $10.72, while JPMorgan shares were closed up 4 cents to $46.28.

The NYSE Financial Sector was down for most of the morning, but closed up fractionally to 7,703.41.

Merrill Lynch ( MER) CEO John Thain told Japan's Nikkei newspaper he had no plans to sell the company, merge with a bank or raise fresh capital. Thain also told the paper that Merrill Lynch has plenty of capital and does not need to return to the equity market. Merrill jumped 55 cents to $45.89 on modest volume.

Commercial lender CIT Group ( CIT) announced that it decided to exit the student loan business as continues its efforts to stabilize the company. CIT shares jumped 6.1% to $15.01 as investors seemed willing to accept the $20 million charge.

Another mover was MF Global ( MF) which soared 30% with no clear news available. The New York Stock Exchange asked the company to comment and MF Global declined to remark on trading activity. The options broker has been the subject of liquidity concerns and has seen its shares collapse from $32 down to $3.64. Reuters reported that there was speculation of a takeover at $17 a share. The stock closed up $1.45 to $11.47.

The afternoon was kind to Jackson Hewitt Tax ( JTX) after its shares skyrocketed during midday trading on no news. The stock closed up 17.1% to $14.08.

Downgrades also contributed to some declines in the market. Stern Agee initiated coverage on regional bank South Financial Group ( TSFG) with a sell rating, sending the shares sliding 8.8% to $13.11. Another regional bank, Renasant ( RNST) was downgraded by Janney Montgomery Scott to "neutral" from a "buy". That stock traded down 5.5% to $22.03.